Category Archives: Accounting firms

KPMG: Best Islamic Assurance and Advisory Services Provider

KPMG: Best Islamic Assurance and Advisory Services Provider

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KPMG firms were named Best Islamic Assurance and Advisory Services Provider for the second year in a row at the 2009 Euromoney Islamic Finance Awards ceremony in London.

Now in its seventh year, the awards are regarded by many in the sector as the benchmark awards for the global Islamic finance industry.

Read the rest …

Ernst & Young: The Islamic Funds and Investments Report

Ernst & Young: The Islamic Funds and Investments Report

The Islamic wealth management industry has grown tremendously in recent years. With the economic landscape in the region, increasing wealth and strengthening demand for Shari’a complaint investments indicates immense potential for further growth of the industry.

Reflecting these developments, the Ernst & Young Islamic Funds & Investments Report 2007 identifies key trends in the Islamic wealth management industry and highlights the implications of these for industry players.

Read the report here …

Three Indonesian banks to open Shariah-compliant units

Three Indonesian banks to open Shariah-compliant units

Three Indonesian banks plan to open sharia-compliant units this year to tap the potential of Islamic finance in the world’s most populous Muslim country, a central bank deputy governor said on Wednesday.

Analysts say Indonesia has the potential to become a major player in global Islamic finance because around 85 percent of its around 226 million people are Muslim.

It lags neighbouring countries like Malaysia and Singapore because of tax and accounting framework issues, but analysts expect sharia financing to take off after parliament passed the long-awaited sharia finance law last months.

Siti Fadjrijah told Reuters state-owned PT Bank Rakyat Indonesia BBRI.JK, the country’s third largest lender, and PT Bank Bukopin BBKP.JK, will convert their conventional units to sharia-compliant banks.

She said another state bank, PT Bank Negara Indonesia Tbk BBNI.JK, will also set up a new Islamic bank together with Islamic Corporation for the Development of the Private Sector (ICD), a unit of Islamic Development Bank.

“This year three new sharia banks will be established in Indonesia,” Fadjrijah said on the sidelines of an Islamic finance conference in Jakarta.

When asked if Bank Indonesia will give more licences for foreign banks, she said:

“It depends. When investors establish a new bank I will ask what are their expectations, how they will increase their business. We must know their target.”

Global Islamic assets are growing at an annual pace of 20 percent and are set to hit $2 trillion in 2010 from the current $900 billion, thanks to a flood of petrodollars, Ernst & Young said in February.

Sharia, or Islamic law, bans payment of interest, allowing money to be earned only from physical assets. It also bars investment in alcohol, tobacco or gambling.

HSBC is the only foreign bank which has sharia operations in Indonesia, but there are several domestic banks with sharia-compliant operations.Indonesia’s central bank said in July it expects total assets of Islamic banks to rise to 91.57 trillion rupiah by the end of 2008.

Fadjrijah said the country’s Islamic banking industry is set to meet its target of a 10-15 percent share of national banking assets by 2015 from less than 5 percent currently.

Hong Kong visits Dubai to promote Islamic Finance opportunities in China

Hong Kong visits Dubai to promote Islamic Finance opportunities in China

This sounds a little absurd but actually makes perfect sense. This morning a high-level delegation of Hong Kong financiers held a seminar for 200 guests in Dubai to promote the Chinese special economic zone as a gateway to Shariah-compliant fund-raising and investment in China.

Deputy chief executive of the Hong Kong Monetary Authority, Eddie Yue said: ‘Some people have expressed skepticism about a role in Islamic Finance for Hong Kong. But local market players have been quick to develop Shariah compliant products.’

The first Islamic fund introduced by a local bank was approved late last year and is an index-tracking fund for the Dow Jones Islamic Market China/Hong Kong Index. Then in December the Hong Kong Mortgage Corporation signed a joint venture agreement with Malaysia’s Cagamas Berhad to develop Islamic mortgages.

‘What makes Hong Kong a natural destination for Islamic funds is our deep and highly liquid capital markets,’ Yue added. ‘Almost all the most actively traded financial instruments are available for exchange in Hong Kong, and that gives Islamic investors a much wider choice of where to place their funds.’

In a keynote address, Dr Nasser H. Saidi, chief economist of the Dubai International Financial Centre Authority said that Hong Kong could also have role for developing ‘straightforward or convertible sukuks’ for sale to burgeoning Chinese savers to fund projects in the Middle East.

‘There is a rapid integration of Shariah compliant products into mainstream global finance,’ he added. ‘In Dubai the next move will be to centralize Islamic finance with a single DIFC Shariah Board to simplify and standardize the issuing of sukuks. We will be developing our links with Hong Kong.’

However, Chinese IPOs have dried up in Hong Kong this year, after a record $76 billion was raised in local capital markets in 2007. Some attendees at the seminar thought Hong Kong was now looking for the next big thing in global finance and was late in catching on to Islamic Finance.

‘It may be true that Hong Kong has started development more recently,’ said Yue. ‘But so long as the demand is there, it is never too late for Hong Kong to contribute to this vibrant growth sector.

‘The abundance of oil-driven liquidity generates a huge appetite for investments that comply with the tenants of Islam, which can not be satisfied within the Gulf area alone. Such investments can be found in the emerging markets of Asia, especially in China which is best accessed from Hong Kong.’

With a population of 1.3 billion people and a GDP that has been growing in excess of 10 per cent for the past decade, it has hard to argue against investment in China as a long term proposition.

Several other speakers stressed the scale of the opportunity and the strengths of Hong Kong as a platform with its strong commercial links and legal system. But it is clear Islamic finance in China will be a two-way process both for investment into the Middle East through sukuks and for investment into the growth story of China.

KPMG wins top Euromoney Islamic Finance award

KPMG wins top Euromoney Islamic Finance award

KPMG recently nabbed the top prize at the 2008 Euromoney Islamic Finance Awards ceremony in London, UK.

‘KPMG’s breadth of assignments and the diverse geographic spread of their business was very impressive and was a key factor in selecting the company for the award,’ the Magazine said.

‘KPMG’s assignments span Europe, the Middle East, Asia and Africa and it is well positioned to work with its clients as Islamic finance expands globally.’

Over the last year, KPMG member firms have provided assurance and advisory services to over 50 Islamic financial institutions in the UK and Western Europe, the GCC, the Far East, North America and Africa.

This work includes services undertaken on behalf of ventures looking to bring Islamic finance into new markets, national financial regulators exploring Islamic finance for the first time, and the conversion of a conventional bank to a stand-alone Islamic bank.

In addition, KPMG is a member of the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) and the Islamic Financial Services Board (IFSB).

KPMG LLP Global Chairman of Financial Services Brendan Nelson said, ‘2008 promises to be an exciting year for Islamic finance as the industry becomes more competitive and continues to look for new growth opportunities globally. With appropriate support, we believe this industry will continue to thrive.

‘KPMG has a long track record of working in the global Islamic Finance sector and we are delighted to receive this award as we believe it serves to further highlight our commitment to this space.

Meanwhile, European Head of Financial Services, Jeremy Anderson, said ‘Through intense focus on our clients’ business objectives, and a collaborative approach to implementation, we have been privileged to work alongside our clients as this fascinating market has expanded and matured.

‘We are now in a position of dominance in the UK in terms of our share in regulatory, tax and audit work for Islamic banks. We are pleased to accept this award as a testimony to our good work, which we will continue into the future.’

KPMG is the global network of professional services firms who provide audit, tax and advisory services. KPMG LLP operates from 22 offices across the UK with over 10,000 partners and staff.

KPMG in the UK recorded a turnover of 1.45 billion sterling pounds in the year ended September 2006. KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.